Startup SteelBrick Aims to Plug CPQ Hole in Salesforce.com Ecosystem

As Dreamforce, Salesforce.com’s annual industry event, gets underway in San Francisco today, one of the companies on the show floor that is likely to get its fair share of attention is SteelBrick, a startup that’s jumping on what it sees as an irresistible opportunity: plugging the CPQ (configure, price, quote) gap in the Salesforce.com ecosystem.

Spearheading SteelBrick’s effort is the company’s CEO, Godard Abel, a serial entrepreneur who co-founded BigMachines, a CPQ provider that he sold to Oracle a year ago. I recently spoke with Abel about this new opportunity, which arose in January, when Abel invested in SteelBrick and assumed the CEO role. I asked him if it’s accurate to say that SteelBrick is to Salesforce.com as BigMachines was to Oracle before Oracle’s acquisition of BigMachines. He said one could say that:

We built BigMachines on an Oracle stack—Oracle databases, Oracle application servers, so it very much fit on that stack and footprint. And certainly now with SteelBrick, we’re doing it natively on top of the Salesforce platform, using their databases and their cloud infrastructure. But it’s different, in the sense that certainly five or 10 years ago, these cloud application platforms just didn’t exist. So it’s a valid analogy, but with a different form of deployment.

So does it follow that a Salesforce acquisition of SteelBrick is a plausible scenario? While he made it clear that no one should expect any such thing to happen anytime soon, Abel hardly scoffed at the notion of it happening somewhere down the road:

We don’t see that in the near future. [It might have been a more likely scenario] before I invested, and we also just had Emergence Capital invest—they’re very savvy cloud investors. Obviously, Salesforce does not fully disclose their plans to anyone, but we’ve had enough conversations where our perspective was that it’s not an area Salesforce is looking to get into within the next couple of years. Our sense is that Salesforce has chewed off a lot in other areas, and that for right now, they’re happy to partner in our category. It’s not an area they feel like they need to own, at least not right now.

Abel affirmed that he had no affiliation with SteelBrick prior to assuming the CEO position in January:

The company had been built and bootstrapped by the founder, Max Rudman, who is now CTO of the company. I met Max through the Salesforce ecosystem, at events like Dreamforce. He had been focused on building the CPQ product for SteelBrick since 2010. When Oracle bought BigMachines, I thought that would take them out of the Salesforce ecosystem, which I think it largely has, because Oracle and Salesforce are competitors—Oracle/BigMachines won’t be at Dreamforce anymore. So we thought there would be somewhat of a vacuum opportunity in the Salesforce ecosystem. SteelBrick’s focus has been more on midmarket, high-growth, high-tech companies.

All of that meant that when Abel assumed the CEO role, Rudman moved from CEO to CTO of SteelBrick. Abel said the collaboration with Rudman in his new position is working out well:

Max’s background is software development—he’s a software engineer by both trade and passion. So I think he likes it now that he can focus all of his energy on working on the cloud development, and working with our customers to take the product to the next level. The things he enjoys less are sales, marketing, finance. So far, we’ve partnered together well—Max is a big shareholder in the company now, as am I. And we’ve collaborated really well—the nice thing is we have complementary skill sets. I’m not an expert in writing the code and the software, and Max is not as much of an expert in sales and marketing and scaling the company.

As if being CEO of SteelBrick wasn’t keeping him busy enough, Abel is also chairman of G2 Crowd, a startup that’s using crowdsourcing and data analytics to change the way market research is conducted, by becoming “the Yelp of enterprise software.” Abel also co-founded G2 Crowd, and was that company’s CEO when I wrote about it in August of last year. At that time, I spoke with Matt Gorniak, who co-founded G2 Crowd along with Abel and a handful of other BigMachines veterans, and was serving as its COO. Now a director at G2 Crowd, Gorniak also serves as SteelBrick’s chief revenue officer. So I asked Abel if G2 Crowd and SteelBrick are connected somehow, or he and Gorniak are shared resources. He said it’s more the latter:

SteelBrick and G2 Crowd are two separate companies. Matt and I started G2 Crowd, then we also saw the opportunity with SteelBrick, which emerged in the last year after Oracle acquired BigMachines. We were in a good position—we got some additional capital from Oracle, and we thought there would be kind of a vacuum in the CPQ market that SteelBrick had built on top of the Salesforce platform. We liked the founder, so we decided to invest to help him scale the company. G2 Crowd had also built a strong team—we had Tim Handorf, one of the other co-founders, who was head of products at BigMachines for a long time, so I’ve worked with Tim for a dozen years. We made Tim president of G2 Crowd, so he’s now running the day-to-day operations there. Matt and I are on the board of G2 Crowd, and we still help. But our operational focus for these last few months has been on SteelBrick, and scaling up operations there.

So what’s his secret to successfully dividing his focus between two tech companies in completely different spaces? Abel said the only secret is building great teams:

In both companies, we have people with whom there’s a mutual trust—the core people, whom I worked with at BigMachines over the last 14 years. I think that’s what gives us the ability to quickly scale two companies. It wasn’t something I was planning on doing—it was more opportunistic. Oracle’s a great company, but a lot of people just don’t want to work for a behemoth company—they really like working in smaller, entrepreneurial companies. A lot of people are happy at Oracle, but a lot come to us and say, ‘Hey, I’d love to get back into something entrepreneurial, that feels like more of a family on a mission.’ That’s what makes it possible—having those people, and that great talent.

A contributing writer on IT management and career topics with IT Business Edge since 2009, Don Tennant began his technology journalism career in 1990 in Hong Kong, where he served as editor of the Hong Kong edition of Computerworld. After returning to the U.S. in 2000, he became Editor in Chief of the U.S. edition of Computerworld, and later assumed the editorial directorship of Computerworld and InfoWorld. Don was presented with the 2007 Timothy White Award for Editorial Integrity by American Business Media, and he is a recipient of the Jesse H. Neal National Business Journalism Award for editorial excellence in news coverage. Follow him on Twitter @dontennant.

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